Paul Cossu, a partner in Pryor Cashman's Art Law Group, recently spoke with the New York Observer about the growing trend among art owners to take out loans secured exclusively by artworks in their possession.
Cossu, who frequently represents art dealers who use works in their inventory as collateral for loans, told the Observer, "Most often, dealers are looking to buy a work that just came onto the market, other times they may need the funds to cover the operating costs of their galleries." Lending to dealers can get tricky, though, as the dealer's goal is still to sell that collateralized artwork. The gallery owner may need to work out with the lender permission to take the art out of the gallery, to art fairs, for instance.
"Things can get complicated as lenders usually like to have control over the collateral, but it can all be negotiated," Cossu said.
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More About Cossu's Practice
Paul Cossu is a member of Pryor Cashman's Art Law Group, where he handles a range of litigation and transactional matters on behalf of auction houses, non-profit institutions, artists, performers, collectors and other members of the arts community.
Learn more about his experience here.
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